Maximizing Success in Peak Season: Your ultimate guide
The holiday season is approaching, and it's time to prepare for peak season. In this edition of Fulfillment Advantage, we'll explore effective strategies for the busiest time in ecommerce and logistics.
Without proper planning, warehouses and fulfillment networks can face issues like stock shortages, late deliveries, and reputation damage.
To ensure a successful peak season, we'll cover everything from warehouse layout optimization to software solutions and contingency planning.
Read on to prepare for peak 2023. ??
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7 Challenges Facing DTC Retailers in Peak Season
As ecommerce evolves, peak season challenges intensify. Online sales surge, pushing order volumes to record levels. Meeting customer demands for fast and reliable deliveries is crucial.
Let's examine the critical challenges:
?? Inventory and Order Management: The surge in online sales, exemplified by the record-breaking $9.12 billion in U.S. online sales on Black Friday 2022, demands efficient inventory and order management systems to avoid stockouts and delivery delays. Without proper infrastructure and processes, managing and fulfilling orders within a short timeframe can be risky. Poor delivery experience is often enough to dissuade customers from coming back.
??Picking and Packing Efficiency: Picking and packing is notoriously time-consuming, especially for companies with inefficient processes for picking, packing, replenishing, and tracking inventory. Companies can’t afford to be inefficient in these crucial warehouse and inventory operations when thousands of orders are waiting.
??Technology Challenges: Many companies rely on outdated software and disconnected systems, leading to manual work and data disparities. Legacy WMS systems that aren’t truly cloud-based and don’t have automation or integration features can’t keep up with the demands of a busy peak season.
??Rising Costs: A majority (79%) of merchants in the Ware2Go survey reported increased costs in 2022. A McKinsey report showed that logistics often accounts for between 12 and 20 percent of the operating expenses of a typical ecommerce firm. As ecommerce adoption among consumers rises, related expenses for ecommerce firms cut into profits.
??Managing Complexities: 3PLs who work with multiple clients face bigger challenges, particularly with the rise of omnichannel delivery options like buy online pickup in store (BOPIS) and curbside or locker pickup. And that’s not even counting other logistical challenges such as labor shortages and supply chain stress.
??Labor Shortages: Hiring and retaining seasonal labor can be a significant challenge, and the prediction of over 2 million unfilled warehouse jobs by 2030 adds to the concern.
??Supply Chain Stress: The unreliability of post-pandemic supply chains is well-documented but can be especially fragile during peak season. Geopolitical upheaval and related economic restrictions, labor shortages, climate change, and other factors have amplified supply chain disruptions stemming from the pandemic. Supply chains lack global resilience, are inflexible and becoming more costly, and are often reliant on out-of-date technologies,
Additional flashpoints such as Black Friday, back-to-school shopping, and events like Amazon Prime Day?– which nearly topped $13B in sales in 2023 – intensify the pressure, emphasizing the need for peak season readiness.
Learn more about these challenges and the current state of the direct-to-consumer (DTC) market in this report.
??Peak Season Warehouse Checklist??
Preparing for peak season demands careful planning and execution. Follow this checklist to ensure smooth DTC fulfillment during high-volume periods:
Infrastructure and Layout:
? Optimize warehouse layout for efficiency.
? Assess rack and storage space.
? Ensure packing stations can handle peak demand.
? Conduct facility cleaning and safety checks.
Equipment and Supplies:
? Verify equipment functionality (conveyor belts, putwall systems, etc.).
? Maintain well-stocked packing stations.
? Prepare backup hardware (mobile scanning devices, printers, etc.).
? Invest in technology upgrades (barcode scanners, robotics systems, etc.).
Software Solutions:
? Adopt a cloud-based WMS.
? Ensure seamless integrations.
? Implement automation rules (AI-based features, order batching system, etc.).
? Enable webhook alerts for fast issue resolution.
Demand Forecasting and Inventory Management:
? Ensure real-time inventory sync and periodic manual counts.
? Analyze historical data to predict demand.
? Collaborate with sales/marketing on promos that affect order volumes.
? Overstock key items to prevent stockouts.
Labor Planning:
? Evaluate staffing needs and hire temporary employees, if needed.
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? Provide comprehensive training in peak procedures.
? Cross-train employees to minimize bottlenecks.
? Establish clear communication.
? Consider taking on additional robots (if you are using RaaS)
Shipping and Delivery:
? Integrate with reliable carriers.
? Automate carrier preferences, packaging procedures, and rate-shopping.
? Offer multiple shipping options and opt for sustainable packaging.
? Implement real-time shipment tracking.
Performance Metrics and Analysis:
? Use demand forecasting for efficient operations.
? Define key performance indicators (KPIs) for peak success.
? Regularly monitor and analyze KPIs.
? Prioritize data visibility and reporting for seller's customer portals.
Contingency Planning:
? Prepare for potential disruptions (natural disasters or supply chain issues).
? Identify backup suppliers to avoid stockouts.
? Craft a delay communication plan for clients/customers.
? Analyze past peak seasons for improvements.
Master the Checklist??: Dive even deeper into the peak season warehouse checklist with our comprehensive blog article – your roadmap to peak season success.
Why Peak Season Preparedness Matters
Meeting high seasonal demand is crucial for logistics operations, as today's consumers expect fast deliveries and real-time tracking.
A weak peak season can harm a business in the age of social media, online reviews, and instant gratification.
As WMS firms add more technology and automation, the gap between successful and unsuccessful fulfillment operations grows wider.
Brand reputation is everything, and operators and other firms not up to the task risk losing both their reputation and customers.
Preparing for peak season is a multifaceted endeavor, but with the right strategies and a well-executed plan, you can navigate the challenges and maximize success in 2023.
Explore the additional peak season tools, including the full Logiwa Peak Season Report , you can add to your arsenal in the resources below under our "Deep Dive" section!
Find out where we'll be next!
Live Webinar: Expand Your Business with Amazon FBA - Sept 26 | 12 PM (CDT)
CSCMP Edge 2023 : Oct. 1 - 4 | Kissimmee, FL
WERC Texas : Oct. 26 | Grapevine, TX
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